Not-for-profit organisations provide valuable social services for people in need, which emphasises the significance of having an effective risk management framework as part of their organisational structure.
In Gallagher’s latest blog, the major brokerage explained that risk exposures might occur from providing care, using volunteers, hosting events, or operating support services for areas related to potential criminal activity, such as drug addiction recovery – resulting in legal actions and expenses, involving the organisation’s staff or volunteers, and reputational damage.
Therefore, Gallagher advises brokers to encourage their not-for-profit organisation clients to develop a comprehensive risk management plan by:
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Once your client has identified potential risks and how these impact the organisation, it is crucial to address these risks with proactive and preventative measures, such as:
Gallagher added: “A critical focus for NFPs (not-for-profits) is the organisations’ knowledge and compliance with fundamental legal and regulatory obligations. Keeping a register that lists the national, state, and international legislation/s that affects [the] NFP’s work can help identify the jurisdiction and source of the obligation, as well as recording how compliance is achieved.”
Gallagher’s risk management tips for not-for-profit organisations were released after the publication of its Specialty Management Liability Insurance Global Market Update for August 2022.